Jared Kushner's Family Firm Accused of Pushing Out Tenants

A draft of the pending $10 million lawsuit alleges Kushner Cos. and its partners attempted to push tenants out by creating unlivable conditions with construction noise and dust in violation of state and city rules and laws

Kushner Family Firm Accused of Pushing Out Tenants

The hammering and drilling began just months after Jared Kushner's family real estate firm bought a waterfront warehouse apartment building in the hip, Williamsburg section of Brooklyn.

(Published Monday, July 16, 2018)

The hammering and drilling began just months after Jared Kushner's family real estate firm bought a converted warehouse apartment building in the hip, Williamsburg section of Brooklyn.

Tenants say it started early in the morning and went on until nightfall, so loud that it drowned out normal conversation, so violent it rattled pictures off the walls. So much dust wafted through ducts and under doorways that it coated beds and clothes in closets. Rats crawled through holes in the walls. Workers with passkeys barged in unannounced. Residents who begged for relief got a standard reply, "We have permits."

More than a dozen current and former residents of the building told The Associated Press that they believe the Kushner Cos.' relentless construction, along with rent hikes of $500 a month or more, was part of a campaign to push tenants out of rent-stabilized apartments and bring high-paying condo buyers in.

If so, it was a remarkably successful campaign. An AP investigation found that over the past three years, more than 250 rent-stabilized apartments — 75 percent of the building — were either emptied or sold as the Kushner Cos. was converting the building to luxury condos. Those sales so far have totaled more than $155 million, an average of $1.2 million per apartment.

"They won, they succeeded," says Barth Bazyluk, who left apartment C606 with his wife and baby daughter in December. "You have to be ignorant or dumb to think this wasn't deliberate."

This up-close look at one of the Kushner Cos.' largest residential buildings in New York illustrates what critics describe as the firm's sharp-elbowed business practices while it was run by President Donald Trump's son-in-law and eventual White House adviser Jared Kushner.

The Kushner Cos. told the AP that it didn't harass any tenants to get them out. But the data suggest turnover at the building known as the Austin Nichols House was significantly higher than city averages for coveted rent-stabilized buildings, leaving behind a trail of anger, disrupted lives and a $10 million lawsuit filed late Sunday in which 20 tenants say they were harassed and exposed to high levels of cancer-causing dust.

On Monday, a New York state agency announced it was launching an investigation into whether Kushner Cos. violated state housing laws and regulations meant to prevent landlords from disturbing tenants' peace and privacy.

"We've looked into hundreds of rent-stabilized buildings and this is one of the worst we've ever seen," says Aaron Carr, head of tenant watchdog Housing Rights Initiative, whose investigation led to the lawsuit. "The scale and speed of tenants leaving, the conditions to which they were exposed, provides a window into the Kushner Cos.' predatory business model."

In a statement, the Kushner Cos. acknowledged it received some complaints about construction during major renovations, which ended in December 2017, but said that it responded to them immediately and that "tremendous care was taken to prevent dust and inconvenience to tenants."

It said many tenants moved out when their rent was increased to the maximum allowed under rent-stabilization rules.

Those rules limit the amount that landlords can hike rent each year to protect tenants from getting pushed out, though in this building the rents weren't cheap, with one-bedrooms going for more than $3,000 a month.

Also, the city's building department says it sent inspectors to the building dozens of times since 2015 and uncovered no evidence that construction rules were being violated, a finding that some residents say doesn't square with their experiences.

The landmarked Austin Nichols House at 184 Kent Avenue, for decades a warehouse for groceries and Wild Turkey bourbon, was gutted by a previous owner in 2010 to create sleek apartments that took advantage of the building's high ceilings and waterfront views.

When Jared Kushner and two partners bought it for $275 million in April 2015, they made it clear they wanted to convert the building's 338 apartments — all of them rent-stabilized — into condos. All but nine were occupied, and other than maxing out the rent, developers had few tools if they wanted to get tenants out.

Just months after the purchase, the Kushners began extensive renovations, ripping out appliances, floors and countertops that had been installed five years before.

"There were consistently people in the hallway early, 8 or so, banging on things, taking down walls. There was lots of dust. ... They had fans, and they were blowing dust under the doors," says tech salesman Marcus Carvalho, who left the building in December after six years, deciding the $1,000 or so increase in rent to renew his lease wasn't worth it. "I didn't want to spend another minute in that construction zone."

His 679-square-foot (63-square-meter), one-room apartment, B502, sold the next month for $800,000.

A few weeks after Carvalho left, the woman in C405 couldn't take the noise anymore either.

"It's like having a root canal without the physical pain. ... It was drilling from every direction," says Jane Coxwell, a chef who works late nights and writes at home during the day. "It was impossible to take a call. You could never sit and read a book or get any work done."

Then came the rats, including one she accosted with a tennis racket as it teetered on a curtain rod in her bathroom. She also had to contend with a flood after workers hit a pipe in the unit above her and with the constant fear workers would burst into her apartment at any moment after two with passkeys tried to do just that, once while she was in her underwear.

Coxwell, one of the plaintiffs in Sunday's suit, says she sent dozens of emails to Kushner managers for more than a year asking for help, but got little relief.

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One particularly noisy day she finally broke down, walked up to a construction manager and worker standing near her door and found herself forcing the words out through tears.

"I understand you have to work, but I don't know how to ask anymore," she pleaded. "Please, please, can you keep it down?"

Much of the work was done in 2016, and then the Kushners went on a selling spree. In 2017 alone, the company sold 99 apartments in the building, according to Jared Kushner's federal financial disclosure forms. Brokerage data show an additional 16 apartments sold by early March 2018. That same month Kushner Cos. had 151 vacant apartments in the building, according to a court document.

The Kushner Cos. refused to confirm the numbers.

At the height of the construction, tenants fought back with three dozen complaints to the city's 311 hotline about work after hours, banging and pounding, falling debris and rodents.

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After people complained about dust, Kushner Cos. put plastic sheeting around doorways, though many say it didn't help much. And after they complained about workers entering their apartments without permission, the company eventually posted guards in hallways.

"The banner says 'Luxury Waterfront Homes For Sale,'" says plaintiff Jeff Werner, a banker who's lived in the building for eight years. "It doesn't advertise 'Live in a Construction Zone with White Toxic Dust Blowing.'"

Dust samples taken from nine apartments in May by consultants Olmsted Environmental Services turned up dangerously high levels of lead and crystalline silica. Breathing in tiny silica particles has been linked to lung cancer, liver disease and an incurable swelling of the lungs.

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The $10 million lawsuit alleges Kushner Cos. and its partners attempted to push tenants out by creating unlivable conditions with construction noise and dust in violation of state and city rules and laws. It also alleges the Kushners, by failing to take proper precautions, exposed residents to a "cloud of toxic smoke and dust."

The Kushner Cos. disputed the findings of the environmental report, alleging it appeared to be an updated version of a report prepared several years ago. The company didn't immediately respond when asked for comment about the lawsuit or the investigation launched by Democratic Gov. Andrew Cuomo's Tenant Protection Unit.

Ronan Conroy says he complained to the Kushners several times, walking down to the sales office once to confront management in person.

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"Your strategy is to get people out, right?" Conroy recalls asking a staffer at the desk. He says the man basically shrugged, offered no dispute, then said, "We can let you out of your lease."

Frustrated and facing a big rent hike, Conroy left in early 2016.

"My strong impression is they made the building as unlivable as possible so they could get everyone out of there."

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